Teacher: Dr. Celeste NgStudent : 986216 Betty 986236 Ady

Summarized from: Ignatiadis, I. and J. Nandhakumar (2007). The Impact of Enterprise Systems on Organizational Resilience, Journal of Information Technology 22: 36-43.

Motivation • Hanseth et al. (2001) use Giddens’s concept of a

juggernaut to parallel it with ERP installations in global organizations. Although ERPs are seen as extended control mechanisms in this case, their size and complexity can threaten an organization if they are not managed correctly and allowed to get out of control

Purpose • Conceptualize the way that organizational control is

aided with the use of an enterprise system within a company.

• How drift can result from the use of such a system• The relationship between control & organizational resilience is also proposed• To present the findings from a company case study,

where an enterprise system is being used• To present the findings of a study on the impact of

enterprise systems on organizational resilience through processes of embedding and disembedding, and the creation of control and drift

Literature review• Information system, Power, and control：

– Finnegan and Longaigh (2002), information is seen to be at the core of both control and coordination processes.

– They define control as the process by which one entity influences to varying degrees the behavior and output of another entity, through the use of authority and a wide

– Also mention that technology facilitates control in three ways: changing decision-making structures, formalization of behavior, and monitoring activities

Literature review (cont.)• Coombs et al.(1992),mention that control is used

to draw attention to the intended & unintended consequences of the exercise of power, and the use of knowledge in social & organizational relations.

• Clegg&Wilson(1991),also mention that managerial can be reduced or eliminated when the technology makes redundant discretion, decision-making, and judgment

• Clegg&Wilson,however,argue that technology is not the sole source of control ： controls can be embedded in the physical structure of the labour process, producing technical control, or can be found in the social structure, producing bureaucratic control

Literature review (cont.)

• Robinson&Wilson(2001)see three ways in which the work regime within an ERP system is enforced：– the integrated approach to control within an ERP model

allows for its automation in a way that replaces traditional forms of hierarchical supervision

– ERPs can strengthen corporate cultures so that employees are encouraged to identify themselves with the organization’s products & values

– ERPs also specify the ways in which work is to be carried out, by defining the business processes, and hence the job content of one’s work

• ERPs are seen as rigid control mechanisms, there’s still scope for human agency to take place within such systems.

Literature review (cont.)

Theoretical lenses: Embedding-disembedding & control

• Giddens defines disembedding as “the lifting out of social relations from local contexts of interaction and their restructuring across indefinite spans of time-space”

• According to Giddens, embedding (or reembedding) is “the reappropriation or recasting of disembedded social relations so as to pin them down (however partially or transitorily) to local conditions of time and place”

Theoretical lenses: Embedding-disembedding & control

• Three determinants that impact on control:– Differential power. Knowledge in this case is more

available to those in positions of power.– Role of values. Different perceptions and values of

different settings in this case imply a different approach to knowledge and, consequently, on ways to solve a problem.

– Impact of unintended consequences. This refers to the case where no amount of accumulated knowledge can include all circumstances of its implementation, leading to unintended outcomes

Research approach• Case study According to Yin(2003),”case studies are the

preferred strategy when how or why questions are being posed, when the investigator has little control over events, and when the focus is on a contemporary phenomenon within some real-life context.

• As this research examines the question of how ERP affect the control & resilience aspects in a company, case study research is an appropriate method.

Case study• Company is Transcom：

– Employs more than 74,000 people in over 70 countries worldwide

– It has more than 100 years of experience in its sector

– Four offices of TransCom in the UK were visited

– The ERP system installed at TransCom is SAP R/3, and it was fully installed in January 2002

• Company is Transcom– It is currently implemented in the UK,

France, Spain, Romania, Sweden, Chile, and the United States, with an emphasis on global deployment in the future.

– Prior to installation of the SAP system, another ERP system (BAAN) was used, as well as a standalone finance system

Case study (cont.)

• Data collect:– The research was carried out between February

and August 2005– Using semi-structured interviews & non- participant

observation

• Data analysis:– this research was carried out using techniques from

grounded theory (Strauss and Corbin, 1998)

• Resilience was involved in analysis on the understanding that excessive control can inhibit resilience

Case study (cont.)

• Disembedding in enterprise system– Increased control caused by the centrality of the configuration

of the enterprise system, and the concentration of power in the hands of selected individuals

– As control increases, rigid mechanisms are put into place to make the organization more rigid and robust

– As such, the processes and procedures in the company are solidified, and strict rules apply regarding access to and manipulation of company data.

– Depending on the degree of this rigidity in rules (enforced by the enterprise system), the company may become too inflexible to respond efficiently to conditions of change and stress, and therefore become less resilient.

– Manipulation or relaxing of those rules may, however, lead to more flexibility (with the cost of partial loss of control), and hence resilience can actually increase

Discussion & Theory Development

• Reembedding in enterprise system– This is achieved with the distributed nature of enterprise

systems, which can be deployed in many locations across time space

– The reembedding of these power relations, there may be drift because of the impact of unintended consequences of the system and the role of values of people in solving a problem

– This reduction in control may serve to increase the resilience of the company, because the employees appropriate the system for their own use & are, hence, able to respond more to change when this occurs

– When the employees fully follow the processes and procedures dictated by the system, then there is less or no drift, and the control structures imposed by the system are reenacted

– Depending on the degree of rigidity imposed by the enterprise system, resilience may actually decrease

Discussion & Theory Development (cont.)

Conceptualization of disembedding and reembedding in enterprise system

• Disembedding, occurs as part of the global nature of an enterprise system with a centralized configuration. – What are disembedded in this case are

various pieces of informational data in the system that are made available to authorized users.

– This leads to increased control as a result of the creation of power differentials

Conceptualization of disembedding and reembedding in enterprise system (cont.)

• Reembedding then occurs as part of the distributed nature of an Enterprise System, which can be deployed across time space– What is reembedded in this case is the same

information that was disembedded previously, which can now be used and processed by authorized users

– This may lead to drift, stemming from unintended consequences of the system, and the perception of users regarding their use of the system

Conceptualization of disembedding and reembedding in enterprise system (cont.)

1. Too much control in this case can make the organization too inflexible to absorb strain and recover from untoward events that may occur. As a result, the organization may become less resilient

2. if control is appropriately implemented to match the organizational needs, the company may become more resilient to change

3. This may come together with some possible drift from the original company’s goals and objectives,

4. This drift, if managed correctly, may serve to make the company more flexible and resilient to future events that it may encounter

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Conclusion• Too much control

– can serve to streamline the operations of the company, but at the same time can decrease the resilience of the company to respond to future changes

• Too little control– can cause excessive drift, which can be harmful to the company

• Best way– to allow for the required controls to be implemented, but at the same

time, not stifle the ability of the company to respond to future challenges

• The disembedding process can lead to increased control, which if done excessively can stifle resilience. On the other hand, the consequent embedding process can lead to drift, which, if not left to get out of control, can serve to increase organizational resilience

Limitation

• A limitation of the current research is that only one instance of enterprise-wide information systems has been examined, that of an ERP

• The boundaries between the latter and that of an ERP start to blur, it would be beneficial to examine the degree to which those systems strengthen or weaken the potential for organizational control and flexibility

Contribution • This research shed a new light on the way that enterprise

systems can impact the organizational resilience of a company

• This research has been to refine and conceptualize the ways in which this can occur, through the embedding and disembedding of information, and the creation of power differentials

• The implication of this research for designers and developers of enterprise systems is that they should work closely with managers and end users of the system to make sure that the appropriate levels of authorizations and access profiles are built in and available in the system

• Future research may investigate other (intra- or interorganizational) systems such as the customer relationship management or supplier relationship management systems

Relationship between MIS field and this study

• MIS definition:– MIS is a Human–Computer integration system which

provides information, and supports organization’s daily work , management ,and decision-making (by Gordon B. Davis ).

• This research provides decision-maker a new light on the way to understand how to make decision to let organization structure fit with business strategy and then increase competition advantage.

• Because enterprise system is a technology of MIS field, this study talk about how to use this system effectively to let organization become more resilience or balance control.